The Impact of Budgeting and Budgetary Control on the Liquidity Levels of Non Profit making Organizations in Uganda

Abstract:

This
study was conducted using Infectious Diseases Institute (IDI) as the Case
study. A sound and effective budgeting system is based upon certain
prerequisites/or conditions. Failure to observe and appreciate these essentials
will render the budgeting exercise ineffective (Arora, 1995). It was against
this background that the study was aimed at examining the effectiveness of IDI
budget systems and its impact on the liquidity levels of the Institution.

The
respondents were selected using purposive and simple random sampling
techniques. Descriptive and Associational research designs were adopted with
Data gathered through Questionnaires and interview guides. The SPSS technique
was used to establish the relationship between Budgeting systems and liquidity
levels.

The
major findings from the research study indicated that the budgeting systems
used were inapt. It was also revealed that, there exists a positive relationship
between Budgeting systems and control and liquidity level. In this respect, it
was concluded that though many other factors were pointed out as possible
causes of the declining levels of liquidity in the Institution between 2010 and
2014, poor budget systems and budget control strategies were largely held
responsible.

Considering
the persistent declining liquidity trend, a new approach of budgeting which
encourages improvement by eliminating inefficiencies and wasteful expenditure
should be adopted.

[8.] Fozzard, A (2001). The basic budgeting problem:
Approaches to resource allocation in the public sector and their implications for
pro-poor budgeting. Kampala: Centre for Aid and public expenditure.